March 7, 2018 / 2:28 PM / 5 months ago

Asia's loadings of W.African oil to slip in March on tough competition

    * Indian buying slides back from close to three-year high
    * Chinese purchases fall to 8-month low on bpd basis
    * Total WAF loadings for Asia fall by 11 pct
    * Graphic on oil exports to Asia: tmsnrt.rs/2dG0SuJ

    By Libby George
    LONDON, March 7 (Reuters) - China's loadings of West African
crude oil are set to slip to an 8-month low in March as stiff
competition and shaky demand have forced sellers to look to
other regions, a Reuters survey of vessel fixtures and traders
showed on Wednesday. 
    The loadings of just over 1.1 million barrels per day (bpd)
are the lowest since July last year, when loadings hit 1.04
million bpd. It is also sharply lower than the peak this year in
January, when loadings hit 1.59 million bpd. 
    The decline pulled overall West African exports 11 percent
lower on the month to 1.93 million bpd. 
    "On the whole, demand is weaker than earlier this year.
Refinery maintenance has started and stock levels are relatively
high," said Ehsan Ul-Haq, director at London-based consultancy
Resource Economics.
    Rising exports from the United States mean those selling the
nation's crude have begun targeting China, joining in
competition from Middle Eastern, North Sea and West African
crudes. This has made keeping market share a constant challenge.

    Additionally, China's independent refineries, commonly known
as "teapots", are grappling with tax rules that took effect on
March 1 and aim to crack down on alleged illicit trade of
invoices and tax evasion.
    The rule change, Ul-Haq said, could crimp the demand for
crude from the refineries. 
    "Runs in teapot refineries are down significantly, leading
to lower demand in China. The new consumption tax introduced by
the Chinese government also does not bode well for independent
refiners."
    Traders and analysts told Reuters that sellers of Angolan
oil, the primary West African supplier to China, had placed more
March-loading cargoes with U.S. and European buyers, helping to
keep differentials supported despite the weaker Asian interest.
    Indian loadings from West Africa were also set to fall in
March from close to a three-year high in February. A wide spread
between Brent and Dubai crude, which is making it harder for
West African cargoes to compete in Asia, hurt sales. But
maintenance maintenance at Indian Oil Corp's top refinery, the
300,000 bpd Paradip refinery, was also a factor.

 COUNTRY      March        BPD       February     BPD
              cargoes      '000s     cargoes      '000s
 CHINA        36           1,103     36           1,221
 INDIA        17           521       23           780
 INDONESIA    4            123       2            68
 TAIWAN       1            31        1            34
 JAPAN        0            0         0            
 S. KOREA     1            31        0            0
 OTHERS       4            123       2            68
 TOTAL        63           1,931     64           2,171
 
    
 (Reporting by Libby George
Editing by Mark Heinrich)
  
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